"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Michael Hemsey, president of 500friends (a Merkle company).

The rise of artificial intelligence and its voice interface will force brands to scramble if they are to become the default recommendation for Alexa-type home devices.

At the same time, increasingly effective face-and-gesture recognition will capture real-time emotional responses that can influence buying decisions. And an influx of consumer data and connectedness suggests a marketing future of increased utility, robotics and hyperrelevant personalization.

These trends will no doubt prove highly disruptive as more brands endeavor to become indispensable to consumers. I don’t think any brand will escape the impact of the internet of things (IoT). Whether it’s through fear of being left behind or envisioning how a brand’s literal and figurative fabric can be woven throughout consumers’ lives, many companies are diving headfirst into connected devices and the promise of data they will deliver.

But the race to embrace IoT is also a double-edged sword: No prudent CEO, CIO or CMO can afford to wait on the innovation sidelines, make hasty investments or take risks that might alienate a customer base or threaten their brand.

Assessing IoT’s Brand Potential And Value

Brands began using connected devices a few years ago to build stronger customer loyalty and collect data about customers’ preferences and behaviors.

The sensors of Disney World's MagicBand, for example, enable visitors to check into their rooms, enter the park and purchase food or souvenirs without queues, cash and credit cards. Disney recommends ways for wearers to bypass crowds, avoid longer wait times on certain rides and optimize their experience of the park. Convenience and utility are embedded into the customer experience, while data drives the brand’s decision-making across multiple service areas.

But the Disney experience is in a silo of its own. Once you leave the theme park, the MagicBand has no value. The same can be said of other IoT products and services. Each may offer a satisfying customer experience, but the IoT ecosystem remains highly fragmented with at least 260 vendors competing in various areas of platform development. This fragmentation can be confusing for customers and will require fewer, more consistent protocols as IoT matures.

Data management poses an equally formidable challenge. Millions of sensors will transmit a massive amount of data in the years to come. Marketing, sales and other business professionals will find themselves drinking data from the proverbial firehose. Managing the data and extracting the most useful analytics will require new ways of thinking, including the use of artificial intelligence and promising developments in self-service data management.

Although interoperability and other bugs need to be worked out, we're talking about IoT as a technology that is wired into nearly everything – homes and offices, stores, cities, cars, appliances, medical equipment and personal products, you name it. Marketers and product developers will be able to better understand how their products are being used (or not used) and meet their customers' evolving needs and expectations.

Beneath the technical veneer, brands and marketers have an opportunity to establish an unprecedented level of intimacy with their customers. But this requires them to make sense out of the greatest flow of data the world has ever seen. While we are overwhelmed by data today, we’re actually only using 1% of it, by some estimates.

For most companies, it’s time to think of IoT as an overarching channel, within which marketers must identify areas that will have the most impact on their brand and customers. Marketers should take a measured approach. There is urgency but the transformation cannot and should not happen so quickly that a brand is threatened and customers and revenues are lost in the process.

Customer Satisfaction And Loyalty In The ‘Internet Of Shiny Things’ Era

As marketing professionals, it’s easy to become transfixed by the shiny things of technology. In this era, however, the focus must be on the new types of personalized marketing campaigns that become possible with IoT, as well as improving customers’ experience.

How does this channel impact a brand’s longer-term business objectives? Will the investment help companies better understand their customers’ expectations and behaviors? With customer retention and sustained growth in mind, brands should refine the IoT channel to best fit its identity, marketing objectives and customers’ habits.

The internet of things is more than a flashy new toy. It’s a complex intersection of technology, marketing and evolving customer needs. It has incredible business potential. Achieving maximum value ultimately means recognizing that our holy grail is customer loyalty and not the next best thing in technology.

1 Comment

You know I love that Disney example, Michael. Although I'd add in that they also heavily customize and personalize their DM marketing pieces to people visiting and staying at the park.
After our last visit, I also noticed they now allow ride-requests through your magic band to be made via mobile phone app. The addition of mobile completes the missing piece in the prior configuration. I'm sure they have long-term plans to leverage that heavily.

Maybe the lesson here is a simple one: Leverage data and connectivity to prepare as much as possible for the conversations you'll have with your customer, and continue to make the message as impactful as possible.